Lyft, Inc. v. AGIS Software Development LLC

Background

This was a patent declaratory judgment action. Lyft sought a declaration that it did not infringe five patents owned or asserted by AGIS Software Development LLC: U.S. Patent Nos. 7,031,728; 7,630,724; 8,213,970; 10,299,100; and 10,341,838. AGIS had previously asserted the patents against Lyft in an infringement action in the Eastern District of Texas. That court dismissed Lyft for improper venue, and AGIS’s claims against the other defendants in that action were also dismissed.

The Patent Office had granted a request for ex parte reexamination of the ’970 Patent, and that proceeding had resulted in amendments to two challenged independent claims. AGIS had not asserted the new claims in this case. The Patent Office also granted reexamination requests for the ’728 and ’724 Patents after finding substantial new questions of patentability. AGIS did not submit patent-owner statements in those proceedings. Lyft filed inter partes review petitions challenging claims of the ’838 and ’100 Patents, but the Patent Trial and Appeal Board had not yet decided whether to institute review.

Motion to Stay

Lyft moved to stay the case while the reexaminations and inter partes review proceedings continued. Lyft argued that the case was at an early stage, that post-grant proceedings covered 64 of the 68 claims at issue, and that the proceedings were likely to simplify the litigation. Lyft also argued that AGIS would not suffer undue prejudice because the parties were not competitors.

AGIS argued that the case had advanced through jurisdictional discovery, exchanged infringement and invalidity contentions, and claim-construction disclosures. It also argued that review was not pending for the ’970 Patent, that the inter partes review petitions had not yet been instituted for the ’838 and ’100 Patents, and that a stay could prejudice AGIS because its CEO and primary witness was of advanced age.

Court’s Analysis

The court applied three factors: the stage of the case, whether a stay would simplify the issues, and whether a stay would unduly prejudice or create a tactical disadvantage for the nonmoving party.

For the first factor, the court found that the case’s stage strongly favored a stay. No operative complaint was on file, no merits discovery had occurred, and the most burdensome parts of the litigation were still in the future. The limited jurisdictional discovery and exchanged contentions weighed little against staying the case.

For the second factor, the court found that simplification favored a stay. The court noted that 64 of 68 claims—94 percent—were likely to be or were already under review in post-grant proceedings. Although the inter partes review petitions for two patents had not yet been instituted, the court considered them more compelling because substantively identical petitions filed by Uber had previously resulted in institution of review. The court also found simplification likely from the granted reexaminations of the ’728 and ’724 Patents. The absence of post-grant proceedings for the ’970 Patent did not outweigh the review involving the large majority of claims.

For the prejudice factor, the court found the factor neutral. The timing of Lyft’s inter partes review petitions and Lyft’s three-month delay in filing the stay motion weighed against a stay. The status of the review proceedings and the relationship between the parties weighed in favor of a stay. The court acknowledged the concern about AGIS’s CEO and primary witness but found that AGIS had not described the resulting prejudice with sufficient specificity. The court also stated that schedule-compression concerns could be addressed by modifying the schedule later.

Order

The court granted Lyft’s motion to stay. The parties must file a status update based on the earlier of 180 days after the order or resolution of the specified reexamination and inter partes review proceedings. All pending motions, including discovery motions, were terminated without prejudice to refiling after the stay ends. The stay did not cover Lyft’s filing of its First Amended Complaint as previously ordered or the parties’ filing of a stipulated proposed redacted version of the court’s sealed order before May 25, 2022.